Pay For What Works

The nation’s 47 million uninsured are not the only reason that health care has become a big issue in the presidential campaigns. Besides leaving many uncovered, the U.S. also has trouble controlling the spending habits of a health care colossus that is on track to consume 20 cents of every dollar by 2015, a tripling from 1970 levels. Even back in 2005, the health expenditures for each U.S. citizen exceeded the entire per capita incomes of Chile or Venezuela.

The spending binge is rooted in the nation’s technophilia: medical technology accounts for as much as half the growth in health care spending. Although this trend has benefited everyone—witness the near halving of cardiac arrest deaths from 1980 to 2000—not all those added dollars have been as well spent as drug and device manufacturers would have us believe. Our love affair with next-generation imaging machines, implantable devices and the like has blinded us to the reality that scant evidence often exists for whether something novel works any better than existing equipment, procedures or chemicals.

The recently published book Overtreated by New America Foundation Fellow Shannon Brownlee documents how surgical operations to relieve back pain, elective angioplasties that dilate partially obstructed coronary arteries, and superfluous computed tomography contribute to the $400 billion to $700 billion in medical care (out of a $2-trillion health care economy) that does not better our health. In 2005 the state of Ohio had more MRI scanners than did all of Canada, leading physicians in Toledo to joke about why cars passing by city hospitals don’t swerve out of control because of strong magnetic fields. Yet studies have shown that imaging techniques such as MRI have not improved diagnosis as much as doctors and patients think they have.

Brownlee’s book does not even touch on some ultrahigh tech, such as the University of Texas M. D. Anderson Cancer Center’s $125-million proton-beam facility, replete with a physics-grade particle accelerator, that zaps tumors. Questions remain, however, about whether proton beams are more effective than another form of radiotherapy that M. D. Anderson already offers.

One solution, advocated by Brownlee and some other health policy analysts, is a rejuvenation of the Agency for Healthcare Research and Quality (AHRQ)—or the creation of an organization like it—that would compare different treatments (a mission not within the Food and Drug Administration’s purview). It would be entrusted with comparing the benefits and risks of drugs, procedures and medical devices, while gauging any benefits against costs. The same Newt Gingrich–led Congress that eliminated the Office of Technology Assessment in 1995 almost did away with the AHRQ, which barely survived with diminished funding and powers: it now serves only as an information clearinghouse, not an organization that makes recommendations on Medicare reimbursement decisions.

Several Democratic candidates, including Senators Hillary Clinton and Barack Obama, have endorsed the need for institutes that would lay the foundation for “evidence-based” medicine. For a revitalized AHRQ or a clone thereof to work as it should will require that a new president follow through with adequate funding, an assurance that Medicare (and, as a consequence, other insurers) will consider seriously its findings and, perhaps most important, a Federal Reserve–like independence from the momentary whims of the political establishment. The original impetus to dismantle the AHRQ came after a group of outraged back surgeons objected to the agency’s recommendation that surgery should not be tried before drugs and physical therapy. A watchdog that helps to ensure we pay only for what works, notwithstanding the entreaties of drug companies and equipment manufacturers to do the opposite, will provide a powerful brake on the spiraling costs already choking our medical system.

or subscribe to access other articles from the
February 2008
publication.